Logistics: Operational backbone of India’s $292bn E-commerce vision

India’s e-commerce sector, projected to grow at 18.7% CAGR to $292.3 billion by 2028, is undergoing a structural transformation where logistics have shifted from a cost center to a strategic differentiator. With 500-600 million online shoppers anticipated by 2030, a significant portion of which will come from Tier 2/3 cities, logistics networks must cater to daily shipments, cash-on-delivery (COD) preferences, and sustainability mandates. 

The sector’s success hinges on three pillars: a 34,800-km highway network under Bharatmala Pariyojana, AI-driven last-mile innovations reducing delivery costs by 28%, and a $1.91 trillion green logistics market incentivizing emission cuts. With these initiatives in place, India’s logistics ecosystem is engineering solutions for scale, speed, and environmental responsibility.

From highways to hyperlocal hubs
The Bharatmala Pariyojana Phase-I, slated for completion by 2027–28, has awarded 26,425 km of economic corridors aimed at carrying 80% of national freight traffic. While 19,201 km (55% of total length) has been completed as of 2025, delays in land acquisition have pushed project costs to ₹8.53 lakh crore, which is 60% over initial estimates. This infrastructure anchors decentralized logistics models. However, reverse logistics remain a bottleneck, largely due to the fragmentation and underdeveloped logistics infrastructure in rural areas.

At the same time, last-mile delivery has become a laboratory for operational efficiency. AI route optimization tools analyze traffic patterns and weather data, reducing failed deliveries while also cutting fuel use. Drones, approved for medical deliveries in 2023, now service several Uttarakhand districts with 90-minute delivery windows, though regulatory constraints limit broader adoption. 

Meanwhile, crowdsourced food delivery and e-commerce platforms typically experience a 40% hike in demand for gig workers during peak seasons. The rise of quick commerce, projected to grow 75% to 100% Y-o-Y, exemplifies this evolution. Many quick commerce companies are now able to achieve 10-minute grocery deliveries in several Indian cities using predictive inventory placement and EV fleets.

Balancing costs and sustainability 
With logistics accounting for a considerable portion of India’s average order values, operators are pursuing radical efficiency measures. Environmental imperatives and consumer demand are reshaping logistics. Fleet electrification leads this charge, significantly reducing per-mile costs. 

The National Logistics Policy 2022 mandates emission audits for large fleets, pushing more and more new logistics vehicles to be electric. Initiatives like the FAME-II subsidy and battery-swapping networks aim to bridge the gap further. Change is evident: over 75% of gig workers making deliveries have ditched petrol and diesel vehicles to adopt EVs, paving way for sustainable logistics and digital commerce industries in India.

Future outlook: Predictive logistics and policy synergies
The sector’s next frontier lies in predictive analytics powered by 5G and IoT. With AI and machine learning models anticipating regional demand spikes with great accuracy, the inventory redistribution across numerous warehouses is receiving the golden touch of automation. 

The Union Budget 2025’s focus on AI infrastructure and e-commerce export hubs will further streamline cross-border logistics, taking the digital economy’s contribution to nearly one-fifth of the national income by 2029-30. Policy reforms like the 0.1% TDS rate for e-commerce operators and Production-Linked Incentives for drone manufacturing signal alignment between regulatory frameworks and industry needs. 

As logistics costs per shipment continue to drop, India positions itself as a blueprint for emerging markets balancing scale and sustainability.

-- Utkarsh Tripathi, COO and Co-founder, Hexalog.